A $45\%$ contribution margin ratio means that:

Multiple Choice

the company should contribute $45\%$ of its operating income to qualified charities for maximum tax benefits.

$55\%$ of the company's revenue is consumed by fixed and variable costs.

the company's revenue has increased by $45\%$ during the current accounting period.

$45\%$ of the company's revenue is available to cover fixed costs and to contribute toward operating income.

A $45\%$ contribution margin ratio means that:

Multiple Choice

the company should contribute $45\%$ of its operating income to qualified charities for maximum tax benefits.

$55\%$ of the company's revenue is consumed by fixed and variable costs.

the company's revenue has increased by $45\%$ during the current accounting period.

$45\%$ of the company's revenue is available to cover fixed costs and to contribute toward operating income.

Operating income can be calculated by:

Multiple Choice

dividing fixed costs by the contribution margin ratio.

multiplying fixed costs by the contribution margin ratio.

multiplying the margin of safety by the contribution margin ratio.

dividing the margin of safety by the contribution margin ratio.

Operating income can be calculated by:

Multiple Choice

dividing fixed costs by the contribution margin ratio.

multiplying fixed costs by the contribution margin ratio.

multiplying the margin of safety by the contribution margin ratio.

dividing the margin of safety by the contribution margin ratio.

Multiple Choice

is included among the monthly operating expenses as a variable cost.

is considered a fixed cost of doing business.

is treated as a semivariable cost that is partially dependent upon sales volume.

is generally ignored.